China in Africa: The Real Story

I'm disappointed that one of my favorite magazines, The Atlantic, published on June 24, 2011, a short and sloppy article by Max Fisher-- "In Zimbabwe, Chinese Investment with Hints of Colonialism." This is a striking example of some of the superficial, error-ridden, and at times irresponsible China-Africa
analysis that a major magazine can casually publish. Articles like this -- apparently dashed together out of a quick spin through the internet -- are all that America's elite opinion makers are likely to read about China's role in Africa. That's a pity.

Fisher doesn't much care for Mugabe and neither do I. Mugabe is an appalling leader. His policies over the past decade have driven his country into the ground. His refusal to relinquish power in legitimate elections has been devastating for Zimbabweans.

Fisher also highlights concerns by Zimbabwean construction workers, restaurant staff, and labor unions about Chinese employers: these are no doubt a reality: Chinese managers have a well-deserved reputation for poor working conditions. Sadly, there's no news in these claims, which have been voiced often in African and international media (and which form the centerpiece of a good edited volume published in Namibia by the trade union movement).

Fisher ignored something that was interesting and new: the complaints by Zimbabwe's trade unions were taken seriously by the Chinese who sent a delegation in response. As Veneranda Langa reports from Harare, after the labor problems hit the media, the Chinese government reacted:

A high-level delegation from the Overseas Chinese Affairs Committee (OCC) of the National People’s Congress of China is in Zimbabwe [June 13, 2011] to hold seminars to encourage Chinese nationals to live harmoniously with locals in an effort to boost relations between the two countries.

As for the low salaries, also undoubtedly true -- but the union complaint that that some Chinese companies pay only $4 a day (about $120 a month for a five day week) as wages has to be seen in the context where statutory minimum wage figures in 2009 were $100/month for mining, $150/month for government workers, or $30/month for domestics. (Zimbabwe has no overall minimum wage, only minimum wages for different sectors; these are re-negotiated regularly.)

But let's look at some of Fisher's other claims:

China has won "near-exclusive dominance of everything from mineral rights to labor standards" ...

These claims about exclusive access to mineral rights would come as a surprise to the many international mining firms that have ongoing mineral investments in Zimbabwe, particularly those with extensive investment in the platinum sector, including Canada's Caledonia, and Impala Platinum (the South African firm that is the major shareholder of Zimplats) as well as the mining giant Anglo-American.

It's my guess that discussions of a $3 billion line of credit offer (not a contract or concluded deal) appear to be real -- a line of credit has been under discussion since 2006 but there have been many sticking points. However, if this happens, it would clearly not be a "swap" of $3 billion for "all of Zimbabwe's platinum", but rather a resource-secured line of credit linked to a platinum deposit like the one that was earlier encumbered for another Chinese loan. This bears some similarity to the DRC's copper "deal of the century".

Well, he does seem to get treatment in Singapore -- he's been six times recently. But isn't this stretching it a bit in an article on "Chinese colonialism"?

Fisher also gives us an alarmist interpretation of a complicated and politically controversial project:

A massive military compound is under construction in Harare, built by Chinese firms and with a Chinese loan of $98 million. The open-ended loan, which the already indebted Zimbabwean government has no obvious way of paying back, means that this component of the country's military will be effectively Chinese-owned ... the expensive facility will hand a small but important part of Zimbabwean sovereignty over to Chinese lenders.

Neglecting to mention that the "massive military compound" is actually the site of Zimbabwe's new National Defense College, Fisher puts a scary spin on something that is a tad more ordinary. (And why portray the signed loan as "open ended"?)
Here's the history of this project: In 2008, the Zimbabwe government/military decided to upgrade the Staff College run by the University of Zimbabwe, and enable it to have the capacity to offer a BA and MA degrees in Defense and Security Studies. But they didn't have the money to do this. So they negotiated an "obvious way to pay it back": secure a concessional loan from the China Eximbank with the future export of Zimbabwean resources from a joint venture between the Chinese construction company and the Zimbabwe government (again, this resembles the DRC copper/infrastructure model).

Using aid for a project like this is a good example of the downside of China's request-based aid (the package deal seems to have been cooked up between Anjin Corp and the Zimbabwe Defense forces) and Chinese deference to local ownership (i.e. the Unity government -- and Zimbabwe's Parliament, which ratified the deal) in making decisions on how to use aid finance. (I talk about these problems more in The Dragon's Gift).

Surely Zimbabwe has better uses for its diamonds than using them to pay to build the professionalism of its military. (And surely my own country, the US, has better uses for our money than paying for our military's desires... and yet still we do it, and ironically we also finance it by borrowing from the Chinese!). But rather than China now 'owning' part of Zimbabwe's military, China Eximbank will have a lien on part of the Marange diamond fields.

Fisher then moves into shakier territory with a couple more myths:

In 2006, China paid Mozambique $2 billion for a deal to dam off the Zambezi river and send 3,000 settlers to populate the valley, some of the country's most fertile land.

This Chinese "deal" for the Mpanda Nkua Dam on the Zambezi is another zombie myth that has cycled around the internet for nearly six years. When I went to Mozambique in 2009 to look into it, I found that although Chinese credit for a dam had been discussed, it was never finalized. When the contract was given to a Brazilian firm to build the dam in 2008, there was still no financing. There are no Chinese settlers in the Zambezi Valley, and no one I spoke to knew anything about this hypothesized plan. But why check when the truth might spoil a good story?

In a grand conclusion, Fisher widens his scope to the entire continent:

China is snatching up agricultural land across the continent, often with leases nearing a century in length.